ATTORNEY FOR APPELLANT
: ATTORNEY FOR APPELLEE
SCHNEIDER NATIONAL LEASING:
EDWARD R. HALL
Merrillville, Indiana KATHRYN D. SCHMIDT
Burke Costanza & Cuppy LLP
COURT OF APPEALS OF INDIANA
TRUCK CITY OF GARY, INC., )
vs. ) No. 45A03-0402-CV-96
SCHNEIDER NATIONAL LEASING )
and ADIB C. SALEM, )
APPEAL FROM THE LAKE SUPERIOR COURT
The Honorable Julie N. Cantrell, Judge
The Honorable Michael N. Pagano, Magistrate
Cause No. 45D09-0207-SC-3429
August 20, 2004
OPINION - FOR PUBLICATION
Appellant-Plaintiff Truck City of Gary, Incorporated, (Truck City) appeals the trial courts judgment
in favor of Appellees-Defendants Schneider National Leasing (Schneider) and Adib C. Salem (Salem).
Truck City raises two issues, which we expand and restate as:
Whether the trial court erred by considering parol or extrinsic evidence in making
its determination that neither Schneider nor Salem was responsible for the costs associated
with the repairs at issue because a representative of Truck City made an
oral promise to Salem that such repairs were covered by warranty;
Whether the trial courts judgment in favor of Salem and Schneider is contrary
to law because Salemacting as Schneiders agentconsented to the repair work at issue
and, therefore, both are responsible for the cost of such repairs; and
Whether the trial courts judgment in favor of Schneider is contrary to law
because Schneider is financially responsible for the repairs at issue under the equitable
theory of quantum meruit.
Facts and Procedural History
On February 6, 2000, Salem and Schneider executed a Motor Vehicle Master Lease
(Lease Agreement), wherein Salem agreed to lease an over-the-road tractor (Tractor) from Schneider.
The Lease Agreement contains the following provision: [Salem] agrees that it
will, at its sole expense, do all things necessary to maintain the [Tractor]
in good repair, ordinary wear and tear excepted. Def.s Ex. 1.
The Lease Agreement allows Salem to purchase the Tractor at the end of
the leasing period for the residual value, but also provides that: Upon termination
of the Lease, [Salem] at [Salems] expense shall return the property in good
condition and repair, in the same condition as originally delivered to [Salem,] ordinary
wear and tear excepted, to [Schneider] at its place of business . .
. . Id. On May
14, 2002, after noticing a problem with the Tractors injector, Salem took the
Tractor to Truck City for repair. During a subsequent inspection of the
Tractor, an employee of Truck City discovered a leak coming from a gasket.
The Truck City employee advised Salem to have the gasket repaired.
At first, Salem did not consent to have the gasket leaks repaired.
However, the employee informed Salem that the gasket repairs were under warranty and
would cost Salem nothing. The employee next contacted Freightliner regarding the extent
of the Tractors warranty. After the telephone call, the Truck City employee
told Salem: [W]e have warranty. It is not going to cost
you anything. Tr. at 39. In response, Salem agreed to have
Truck City repair the leaking gasket. In so doing, Salem signed a
work order for the Tractor (Contract), which lists the company and owners name
as Ed Salem and the name on the truck as Schneider. Pl.s
Ex. 1. The Contract also contains the following provisions:
COMPLAINT (A) Engine Lite [sic] (Schneider shop says its injector problem?[)]
* * * * *
I hereby authorize the above work to be done along with the necessary
material, and hereby grant you and/or your employees permission to operate the vehicle
described on streets, highways, or elsewhere for the purpose of testing or inspection.
After Truck City had completed the repair work, the Truck City employee told
Salem that everything was covered by the warranty and allowed him to leave
with the Tractor. That evening, the Tractor broke down while Salem was
on the road . . . in the middle of no where.
Tr. at 39. Salem paid a tow truck $299.00 to tow the
Tractor to another repair shop where he learned that all of his oil
had leaked out and almost destroyed the engine. The second repair shop
had to replace the gasket on the Tractor.
One or two days after Salem left Truck City, Truck City was informed
that the gasket work performed was not covered by warranty. Subsequently, Truck
City contacted Salem and advised him that he had to pay for the
repairs. In response, Salem paid for the injector repairs but refused to
pay for the gasket repairs in the amount of $1162.66.
On or about July 30, 2002, Truck City filed a claim with the
small claims court against Schneider, under the doctrine of apparent agency, and against
Salem. At trial, Dale Schlink (Schlink), the warranty manager for Truck City,
testified that Truck City does not make guarantees that the warranty company will
cover everything, but rather, it informs customers that, warranty companies sometimes dont cover
things. Tr. at 53. Schlink also testified that there was no
way Truck City could know from the get-go whether the Tractors warranty would
cover the repairs at issue. Tr. at 55. However, during cross-examination,
Schlink acknowledged that he did not personally contract with Salem for the gasket
repairs. Rather, a shop foreman likely assisted Salem and that such foreman,
who no longer works at Truck City, could have assured Salem that the
warranty would cover the repairs.
After conducting a bench trial, the small claims court determined that: (1) Salem
was Schneiders agent because, by advertising its name on the Tractor, Schneider gave
third parties reason to believe that Salem had apparent authority to bind Schneider;
and (2) Salem and Schneider are not liable for the gasket repairs because
Truck City promised Salem that such repair work would be covered by warranty.
Accordingly, the trial court entered judgment in favor of Salem and Schneider.
It is from this judgment that Truck City now appeals.
Discussion and Decision
I. Standard of Review
On appeal, our standard of review is particularly deferential in small claims actions,
where the trial shall be informal, with the sole objective of dispensing speedy
justice between the parties according to the rules of substantive law. Ind.
Small Claims Rule 8(A). Nevertheless, judgments in small claims actions are subject
to review as prescribed by relevant Indiana rules and statutes. Ind. Small
Claims Rule 11(A).
In challenging the trial courts judgment, Truck City, i.e., the party carrying the
burden of proof at trial, is appealing from a negative judgment. A
party appealing a negative judgment must establish that the evidence is without conflict
and leads to but one conclusion and that the trial court did not
reach that conclusion. Mayflower Transit, Inc. v. Davenport, 714 N.E.2d 794, 798
(Ind. Ct. App. 1999). The appellant may attack the trial courts judgment
only as contrary to law. Id. On appeal, we will affirm
the trial courts judgment unless all evidence leads to the conclusion that the
trial courts findings are clearly erroneous and against the logic and effect of
the facts. Edwards v. Ind. State Teachers Assn, 749 N.E.2d 1220, 1225
(Ind. Ct. App. 2001). In determining whether the findings of fact are
clearly erroneous, we may neither reweigh the evidence nor judge the credibility of
the witnesses. Id. Instead, we will consider only the evidence most
favorable to the judgment together with all reasonable inferences that may be drawn
A. Parol Evidence
Truck City first argues that the trial court erred by considering certain parol
evidence at trial. In particular, Truck City challenges the trial courts consideration
of evidence regarding an assurance or promise made by a Truck City employee
to Salem that the gasket repairs would be covered by warranty and, thus,
free of charge. In general, where the parties to an agreement have
reduced the agreement to a written document and have included an integration clause
that the written document embodies the complete agreement between the parties, the parol
evidence rule prohibits courts from considering parol or extrinsic evidence for the purpose
of varying or adding to the terms of the written contract. Millner
v. Mumby, 599 N.E.2d 627, 629 (Ind. Ct. App. 1992).
The parol evidence rule is inapplicable to the case at bar because the
Contract in question does not contain an integration clause nor any additional evidence
that the parties intended the Contract to be totally integrated. See, e.g.,
Citizens Progress Co., Inc. v. James O. Held & Co., Inc., 438 N.E.2d
1016, 1021-22 (Ind. Ct. App. 1982). Because the parol evidence rule does
not apply, the trial court did not err by considering evidence of assurances
or promises made by a Truck City employee regarding the existence of warranty
B. Judgment Contrary to Law
Truck City next contends that the trial courts judgment in favor of Salem
and Schneider was contrary to law. In particular, Truck City maintains that
Salem is responsible for the cost of the gasket repairs because he personally
consented to the repair work. Alternatively, Truck City asserts that Schneider is
responsible for the cost of the repair work at issue because Salem, acting
as an agent to Schneider, consented to such repair work. Schneider counters
that Salem was not acting in an agency relationship when he consented to
the gasket repairs and that, in any event, a Truck City employee promised
Salem that the repairs would be covered by the Tractors warranty. We
address Salem and Schneiders financial responsibility for the repairs at issue separately.
1. Salems Liability
Truck City argues that the trial courts judgment in favor of Salem was
contrary to law because Salem authorized the gasket repair work. At the
outset, we note that Salem chose not to file an Appellees Brief.
When an appellee fails to submit a brief in accordance with our rules,
we need not undertake the burden of developing an argument for the appellee.
Johnson County Rural Elec. Membership Corp. v. Burnell, 484 N.E.2d 989, 991
(Ind. Ct. App. 1985). Indiana courts have long applied a less stringent
standard of review with respect to showings of reversible error when an appellee
fails to file a brief. Id. Thus, we may reverse the
trial court if the appellant is able to establish prima facie error.
Jones v. Harner, 684 N.E.2d 560, 562 n.1 (Ind. Ct. App. 1997).
In this context, prima facie is defined as at first sight, on first
appearance, or on the face of it. Id. (internal citations omitted).
Here, the record reveals that Salem took the Tractor to Truck City for
repairs to the injector. When Truck City inspected the Tractor, an employee
of Truck City noticed a leak coming from a gasket and advised Salem
to have the gasket repaired. The evidence further demonstrates that, initially, Salem
did not consent to the suggested gasket repairs. However, the Truck City
employee assured Salem that such repairs were under warranty and would be free
of charge. The employee telephoned Freightliner regarding the extent of the Tractors
warranty and, after that conversation, informed Salem: [W]e have warranty. It
is not going to cost you anything. Tr. at 39. Salem
then agreed to have Truck City repair the leaking gasket. It was
only after Truck City had repaired the gasket and had allowed Salem to
leave with the Tractor that it informed him that the Tractors warranty did
not cover the gasket repairs. This evidence supports the trial courts conclusion
that Salem is not liable for the gasket repair work because the Truck
City employee orally promised or assured Salem that such work would be covered
Indeed, under the doctrine of promissory estoppel, when a person, i.e., the Truck
City employee, makes a promise to another, i.e., Salem, and the other person
takes some action in reliance upon the promise, which action should have reasonably
been expected, the promise may be enforced to avoid injustice. Weinig v.
Weinig, 674 N.E.2d 991, 997 (Ind. Ct. App. 1996). A claim of
promissory estoppel consists of the following elements: (1) a promise by the
promissor; (2) made with the expectation that the promisee will rely thereon; (3)
which induces reasonable reliance by the promisee; (4) of a definite and substantial
nature and (5) injustice can be avoided only by enforcement of the promise.
Id. Here, the aforementioned evidence demonstrates that, to induce Salem to
authorize the repair work at issue, the Truck City employee promised Salem that
such repair work would be covered by the Tractors warranty. The record
further reveals that Salem reasonably relied upon the promise, by consenting to the
gasket repair work, to his detriment. As such, the trial courts judgment
in favor of Salem is not contrary to law.
2. Schneiders Liability
Alternatively, Truck City contends that the trial courts judgment in favor of Schneider
was contrary to law because Salem was acting as Schneiders agent when he
consented to the gasket repairs and, thus, Schneideras principalis financially responsible for the
costs associated with the repairs. Schneider counters that Salem was not acting
in an agency relationship when he authorized the repairs. We do not
need to address the issue of whether Salem was an agent of Schneiders
under the doctrine of apparent authority
See footnote because, even assuming that Salem authorized the
repairs while acting in an agency capacity, the trial court appropriately entered judgment
in favor of Schneider because neither Salem nor Schneider is liable for the
costs of the repairs under the doctrine of promissory estoppel. Accordingly, the
trial courts judgment in favor of Schneider, on this issue, is not contrary
C. Quantum Meruit
Lastly, and in the alternative, Truck City asserts that the trial courts
judgment in favor of Schneider was contrary to law because Schneider should be
financially responsible for the repairs at issue under the equitable doctrine of quantum
meruit. To successfully assert a claim for quantum meruitalso referred to as
unjust enrichmentthe plaintiff must establish that a measurable benefit has been conferred upon
the defendant under such circumstances that the defendants retention of the benefit without
payment would be unjust.See footnote
See Turner v. Freed, 792 N.E.2d 947, 950
(Ind. Ct. App. 2003); see also Bayh v. Sonnenburg, 573 N.E.2d 398, 408
(Ind. 1991), rehg denied, cert. denied, 502 U.S. 1094 (1992). Principles of
equity prohibit unjust enrichment in cases where a party accepts the unrequested benefits
another provides despite having the opportunity to decline those benefits. Wright v.
Pennamped, 657 N.E.2d 1223, 1230 (Ind. Ct. App. 1995), trans. denied.
Here, the record reveals that, at all times pertinent to this action, Schneider
was the owner-lessor of the Tractor. As such, generally speaking, any maintenance
or repair to the Tractor may confer a direct benefit upon Schneider such
that retention of the benefit without payment would be unjust. However, the
evidence before us further demonstrates that soon after Truck City completed the gasket
repair work, the Tractor broke down while Salem was on the road .
. . in the middle of no where. Tr. at 39.
Salem then paid a tow truck $299.00 to tow the Tractor to another
repair shop where he learned that all of his oil had leaked out
and almost destroyed the engine. The second repair shop replaced the gasket
on the Tractor. This evidence supports the trial courts implicit determination that
Truck City did not confer a benefit upon Schneider by making the gasket
repairs. Accordingly, the trial courts judgment in favor of Schneider on the
issue of quantum meruit is not contrary to law.
For the foregoing reasons, we affirm the trial courts judgment in favor of
Salem and Schneider.
SHARPNACK, J., and MAY, J., concur.
The parties and some pertinent exhibits refer to Salem as Ed Salem.
However, Salem personally signed documents as Adib C. Salem.
Footnote: An apparent agency relationship is initiated by a manifestation of the principal
to a third party who, in turn, is instilled with a reasonable belief
that another individual is an agent of the principal.
Smith v. Brown,
778 N.E.2d 490, 495 (Ind. Ct. App. 2002). For this agency relationship
to exist, it is essential that there be some form of communication, direct
or indirect, by the principal, which instills a reasonable belief in the mind
of the third party. Id. Statements or manifestations made by the
agent alone are not sufficient to create an apparent agency relationship. Id.
The theory of quantum meruitwhich literally means as much as he has
deservedis an equitable remedy to provide restitution for unjust enrichment.
Dictionary 1255 (7th ed. 1999). The phrase unjust enrichment is defined as
[t]he retention of a benefit conferred by another, without offering compensation, in circumstances
where compensation is reasonably expected. Id. at 1536.
On July 2, 2004, Schneider moved for appellate damages pursuant to Appellate
Rule 66(E), which provides that: The Court may assess damages if an
appeal, petition, or motion, or response, is frivolous or in bad faith.
Damages shall be in the Courts discretion and may include attorneys fees.
Because Truck Citys appeal was neither frivolous nor in bad faith, we deny
Schneiders request for damages.